I figured out why I have never seen anyone flush mount stock tail lights, it is a LOT of work! It has been a lot of work, but the passenger side it 100% done and the drivers side is started. Here is how I did it:
Mods to the tail light:
1. Break off the red lens on the side of the light.
2. Used some thin platic ( Cool Whip container) to make a cover for the light that just was broke off. This is to make the light narrower, which means a smaller hole in the body later.
3. In the back of the light there is a plate that makes the ground connection, this needs to be cut off just above the divider plate for the reverse light. I used a dremel to make a deep score mark, and then bent it up and broke it off.
4. The top 1" of the back housing needs to be cut off. The wheel well only allows for the hole to go up to the bottom of it, so to make it work I had to gain some height by cutting the back side of the light. This makes the spot for thre reverse light pretty small, but see below to make it work.
5. Add a wire from the ground plate to go to a body ground. The stock light used the bolts that hold it in place for the conenction, and since this is gone it needs another way to ground.
6. I also painted the inside with Chrome paint to make the light reflection a little brighter.